PANews reported on January 22 that according to Reuters, CLS Global, a cryptocurrency financial services company based in the United Arab Emirates, agreed on Tuesday to plead guilty to U.S. charges that the company had provided services to assist in market manipulation involving a digital token created at the request of the FBI to expose fraud in the cryptocurrency industry. CLS Global was one of three companies and 15 individuals prosecuted by federal prosecutors in Boston last year after an undercover investigation in the "Token Mirrors Operation," which marked the first time the FBI personally directed the creation of digital tokens and set up fake cryptocurrency companies to entrap fraudsters.
Prosecutors allege that CLS was one of three market makers that provided illegal trading services to cryptocurrency companies and agreed to help manipulate the market for the FBI-backed NexFundAI token, which runs on the Ethereum blockchain, in a sting operation. CLS admitted in court documents that it agreed to provide services, including fake trades, for the NexFundAI token.
On Tuesday, prosecutors announced that CLS will plead guilty to two counts of fraudulent manipulation of cryptocurrency trading volumes and pay a $428,059 fine. In addition, CLS will be prohibited from participating in cryptocurrency trading on trading platforms available to U.S. investors or providing services to U.S. cryptocurrency customers. CLS Global also promised to conduct annual certifications of its business practices and agreed to settle related civil charges filed by the U.S. Securities and Exchange Commission (SEC).
